Corruption Risks in Renewable Resource Governance: Case Studies in Iceland and Romania

Politics and Governance (ISSN: 2183–2463) 2020, Volume 8, Issue 2, Pages 167–179 DOI: 10.17645/pag.v8i2.2713

Article Corruption Risks in Renewable Resource Governance: Case Studies in Iceland and Romania

Johanna Gisladottir 1,3,*, Sigurbjörg Sigurgeirsdottir 1, Ingrid Stjernquist 2 and Kristin Vala Ragnarsdottir 3

1 Faculty of Political Science, University of Iceland, 102 Reykjavik, Iceland; E-Mails: [email protected] (J.G.), [email protected] (S.S.) 2 Department of Physical Geography, Stockholm University, 106 91 Stockholm, Sweden; E-Mail: [email protected] 3 Institute of Earth Science, University of Iceland, 102 Reykjavik, Iceland; E-Mail: [email protected]

* Corresponding author

Submitted: 14 December 2019 | Accepted: 17 March 2020 | Published: 28 May 2020

Abstract In this research, we attempt to shed light on the question of where corruption risks in the governance of renewable resources are located and how they have been addressed in European countries that have different levels of corruption. A comparative case study design was chosen, looking into the fisheries sector in Iceland and the forestry sector in Romania. We conducted 25 semi-structured interviews with various stakeholders sampled through a snowball method. Qualitative coding and systems analysis were used to analyse the interviews. The results indicate that comprehensive and ambitious legislation does not necessarily translate into successful resource governance systems. In general, the institutions that were put in place to enforce and monitor the legal codes and regulations did not have the capacity to carry out their role. Additionally, interviewees were generally found to have a widespread perception of there being a corrupt relationship between politics and big companies operating in their sectors. Our findings suggest that when people hold such perceptions, it undermines anti-corruption policy efforts in the resource sectors, which can then impede sustainable resource management.

Keywords anti-corruption; corruption; enforcement mechanisms; governance; monitoring; natural resources; renewable resources

Issue This article is part of the issue “Fighting Corruption in the Developed World: Dimensions, Patterns, Remedies” edited by Fabrizio Di Mascio (University of Turin, Italy) and Simona Piattoni (University of Trento, Italy).

1. Introduction chain, but understanding the roles and influences of actors in such systems provides important insights into how Environmental issues are higher on the public agenda in to address the risks (Kolstad, Søreide, & Williams, 2008). light of growing awareness of climate change and there- We adhere to the interpretation of corruption used by fore further efforts are needed to understand how re- Sumaila, Jacquet, and Witter (2017, p. 93) in this context, sources can be used sustainably. The tragedy of the com- where they describe it as “acts of ‘cheating,’ whereby in- mons has been widely cited as a metaphor to portray the dividuals or larger entities act in an illegal manner” which overuse of a renewable resource such as fisheries and serves to undermine both the resource itself as well as its forests (Ostrom, 1999). Rules and systems have there- management. Heywood (2016) suggests that one of the fore been established to regulate use or extraction, but reasons measures to reduce corruption have not been corruption can impede the achievement of management effective, is that disaggregation of the different types of goals. Resource management systems are vulnerable to the phenomenon, actors involved and sectoral context different forms of corruption at all stages of the value has been insufficiently addressed.

Politics and Governance, 2020, Volume 8, Issue 2, Pages 167–179 167 Mapping out the corruption risks in the governance both played an important role for each country in terms of renewable natural resources, such as fisheries and of social and economic development (Ioras & Abrudan, forestry, as well as exploring the policies aimed to re- 2006; Kokorsch & Benediktsson, 2018). The de facto pri- duce them, is both relevant and important in the cur- vatization of the Icelandic fisheries and the repossession rent global sustainability context. Such work should not of forests in Romania following the collapse of the com- solely be directed towards developing countries, espe- munist regime, both occurring in the 1990s, has meant cially since according to the Group of States Against the sectors have been faced with a variety of challenges. Corruption (GRECO, 2017, p. 20), “weaker democracies Even though the sectors are different, they share com- look to Europe for guidance in their fight against corrup- monalities in that external governmental agencies are tion.” Therefore, a comparative qualitative case study de- legally responsible for enforcement of the law. The re- sign was chosen to shed light on the research question search question could, therefore, be explored by compar- of ‘What generates corruption risks in the value chain ing these two cases. of renewable resources in Europe, and how has it been An application for the research was approved in 2017 addressed?’ We aim to improve the understanding of by the Research Ethics Committee of the University of responses to potential risks and how they play out in Iceland. Following that, a stakeholder map was devel- countries with different levels of corruption. Improving oped for each case study (Reed et al., 2009; Durham, understanding of both the risks and the policies meant Baker, Smith, Moore, & Morgan, 2014), and key infor- to tackle them provide insights into the barriers to sus- mants recruited as a result. They were asked to provide a tainable resource management. The small sample that list of possible participants for the research, according to was subject to this study limits the generalization of the a snowball sampling method (Robson, 1993), to ensure findings, which could be strengthened if applied to fur- anonymity. In-depth semi-structured interviews took ther cases. place from March to October 2018. As seen in Table 1, 25 interviews were conducted; 12 in Iceland and 13 in 2. Methods and Research Material Romania. The interviews were conducted in Icelandic, English, and Romanian, with a translator present in We limit the scope of the research by opting for a case- Romania; they lasted approximately an hour, with a few oriented investigation (Ragin, 1987) and thus explore exceptions ranging from 40 minutes to 2,5 hours. To en- the phenomenon within a real-life context by employ- sure a representative sample, 12 of the interviews were ing an exploratory case study strategy (Robson, 1993; taken in the capitals, while 13 were conducted in rural Yin, 2014). Empirical analysis was undertaken as a binary areas or smaller cities. comparison between two selected cases, Iceland and As can be seen in Table 1, the number of participants Romania (Tarrow, 2010). The aim is for the understanding exceeds the number of interviews in the Romanian case. and knowledge generated from the cases to shed light on That is because a participant showed up to the interview the phenomenon in general, making this an instrumental with colleagues. When the numbers in the stakeholder inquiry (Stake, 1995). groups are added up, they are larger than the number of The rationale behind the case study selection was to participants since it was common that people had served explore the initial assumption that countries recorded multiple roles in the sector and could, therefore, be cat- as having low corruption levels were more successful in egorized in more than one group. Notice that we also addressing corruption risks in their value chains as op- refer to ‘current/former’ role in order to better ensure posed to those recorded as having high corruption levels. anonymity. In terms of the age of the participants, each According to the Corruption Perceptions Index, the lower age group is represented. There is, however, an imbal- a country is ranked on the list, the greater the percep- ance between female and male participants. We failed tion that corruption is prevalent. Romania has historically to recruit a current/former member of government as been ranked amongst the bottom of the European coun- well as high-level representative from large companies tries while Iceland has been amongst the top. In 2019, operating within the sectors. The sample is considered Romania was ranked 70th and Iceland 11th out of 180 large enough to gain a general understanding of the phe- countries on the list (Transparency International, 2019). nomenon under study, even though limitations in the The cases were considered feasible as the researchers stakeholder sample are present, especially in terms of already had background knowledge and connections in gender diversity. the countries which served to ensure both accessibility The qualitative coding procedure used to analyse the to participants as well as limiting the resources needed interviews was adapted from the work of Turner, Kim, to carry out the fieldwork. and Andersen (2013). Causal loop diagrams were gen- As the focus of the study was to explore responses to erated based on mechanisms described by the intervie- corruption risks in natural resource management in gen- wees. This method allows us to compare and contrast the eral, as well as how they played out in different sectors, dynamics that contribute to the corruption risks in both a decision was taken not to look at the same resource cases and is further described below. for both countries. Although they have different resource bases, forestry in Romania and fisheries in Iceland have

Politics and Governance, 2020, Volume 8, Issue 2, Pages 167–179 168 Table 1. Overview of the interviewees by stakeholder categorization, country, gender, and age. Stakeholder Iceland Romania NGO staff 0 4 Current/former resource owner/recipient 2 2 Current/former Member of Parliament 2 1 Current/former journalist 1 1 Current/former parliamentary staff 1 1 Academia 3 3 Current/former public official 4 3 Current/former member of government 0 0 Resource owner associations/organization 2 1 Harvesting operations/exploitation of resource 5 4 Small business owner 1 1 Big industry worker 2 1 Owner or manager of a big corporation 0 0 Current/former local politician 1 0 Finance sector 1 0 Total Interviews 12 13 Total Participants 12 15 Of those: Number of female participants 3 1 Number of male participants 9 14 Age 20–40 years 2 5 Age 40–60 years 5 6 Age 60–80 years 5 4

3. Theoretical Background ence of an anti-corruption agency, higher wages for public officials, and efforts to change societal norms The academic debate on corruption has revolved around (Fishman & Golden, 2017). These can also be catego- whether to view it as a collective action problem or a rized as policies aiming at monitoring and incentive pro- principal-agent problem, but recent theoretical work has grams or those which intend to alter the rules of the suggested the two approaches could be considered as system, the latter category being less explored (Hanna, complementary (Marquette & Peiffer, 2019; Williams & Bishop, Nadel, Scheffler, & Durlacher, 2011). In line with Le Billon, 2017). Persson, Rothstein, and Teorell (2018) the utility-maximizing concept, successful corruption- state that collective action theory could be complemen- reduction strategies deter individuals from engaging in tary to principal-agent theory in cases where corruption corruption by making the cost outweigh the benefits is not systemic and the problem of collective action has (Hanna et al., 2011). been solved. The principal-agent approach then ensures According to Kolstad et al. (2008), corruption can oc- formal mechanisms of control, where corruption is de- cur more frequently within resource management where tected and those engaging in it are punished. The ap- the capacity to enforce and monitor the sectors is low. proach includes the utility maximization concept of cor- Additionally, the EU’s anti-corruption report (European ruption, which suggests that it results from rational be- Commission, 2014) states that anti-corruption rules lack haviour in which individuals participate in corruption be- enforcement since the relevant institutions have insuffi- cause the benefits outweigh the costs (Rose-Ackerman, cient capacity and inadequate political will to tackle it. 1978; Søreide, 2014). The expected benefits might con- The policies hinge upon political incentives and approval sist of monetary gains, power, and status, whereas the as they can be undermined by a lack of political will. costs can include bribe payments to hide the act, ef- Policy success in this area can be achieved when author- forts to hide the crime, moral costs of violating societal ities responsible for enforcement are supported by high- rules and norms, and the perceived risk of getting caught level political officials (Fishman & Golden, 2017). (Søreide, 2014). Collective action theory dictates that following this logic of perceived cost and benefit, individu- 4. Results als will base their decision, on whether to engage in corruption or not, on the perception of how likely it is that The empirical analysis of the interview data suggests other individuals are corrupt (Persson et al., 2018). that the implementation and enforcement of legal frame- The pillars of an anti-corruption policy are increas- works are vital factors when it comes to perceptions re- ing transparency, strengthening enforcement, the pres- garding corruption in the resource sectors. We found

Politics and Governance, 2020, Volume 8, Issue 2, Pages 167–179 169 that in both cases, institutions tasked with monitoring amended ever since, and the changes scrutinized. In a and enforcing legislation were not provided with the ca- report by INAO (2018) on the DoF, it is clear that there pacity to carry out their role. This resulted in the percep- are several limitations to DoF operations. It states that tion of there being a suspicious relationship between pol- monitoring of the fisheries sector is extensive and diffi- itics and the businesses operating in the sectors. cult to carry out. Furthermore, surveillance of the fish catch being weighed was deemed unsatisfactory, mean- 4.1. Iceland’s Institutional Organization ing that there were opportunities for an individual or a company to report lower catches than they actually The fisheries sector in Iceland has a positive international landed, indicating that more fish could have been caught image when it comes to the governance of natural re- than ended up being reported. Additionally, the report sources, as it is reputed for its sustainable fisheries man- claimed that monitoring of catch discard was both weak agement. However, even though the fishing quota sys- and unsystematic. tem is renowned for its efficiency, it is still the source of A majority of the Icelandic interviewees voiced con- a great deal of social and political debate in the country cerns over the lack of enforcement mechanisms avail- (Chambers & Carothers, 2017; Kokorsch & Benediktsson, able to the monitoring authorities. According to a cur- 2018). Icelandic fisheries management is mainly based rent/former staff member of the DoF, employees agreed on two bodies of legislation which aim to improve man- that the institution was not powerful: agement of marine resources to ensure that they will be used sustainably, guaranteeing maximum long-term You know the regulation…or the legal framework is output for the Icelandic nation (Icelandic Government, so weak. We can’t handle to, you know, close cases. 1996, 2006). The laws stipulate that the public authori- There is always something, and I even know of cases ties responsible for monitoring the fisheries sector are where those that know someone in the Ministry [of the Directorate of Fisheries (DoF), which operates under Fisheries], can just place a call to the Ministry and get the Ministry of Industries, Tourism and Innovation. The cases dismissed. (personal communication) Icelandic Coast Guard protects the 200 marine-mile zone around Iceland from intruders and occasionally accompa- The individual further described that DoF monitoring nies the DoF to monitor whether vessels operating out at staff regularly encountered scepticism from small-boat sea are doing so according to their permits. fishermen, since they believed the authorities focused on smaller players with minor offences, rather than the 4.1.1. The DoF bigger vessels. Furthermore, when discussing enforcement, a current/former academic stated: The role of the DoF is laid out in The DoF Act (Icelandic Government, 1992). It is in charge of enforcing the And you need ways to actually say that, you know, Fisheries Management Acts, as well as administering and these are the rules, these are the people that are re- monitoring fishing activities. A part of its role is to ac- sponsible for the rules, and then when the rules are company fishermen on their fishing trips and to mon- broken, this is what happens. I think, that is where itor operations and observe whether the discarding of I think, in these later parts, where the system sort of catch is taking place. DoF also measures the size of fish breaks down. (personal communication) that are caught and send the data to the Marine and Freshwater Research Institute, which then compares the Actors have begun to expect that there will be no con- sizes to those of fish that are landed to see whether there sequences brought down upon those who cheat the is any discrepancy which would indicate that so-called system. A current/former journalist claimed that those ‘high-grading’ is taking place, meaning that fishermen working in the sector actually wanted the rules to be discard the smaller fish out at sea and only bring the big- clearer because the alternative to clear rules was chaos. ger, more valuable ones to shore. During 2017, employ- If the monitoring system was so easy to manipulate and ees of DoF went on 306 such trips (The Icelandic DoF, expected consequences for doing so were limited, peo- 2017). As demonstrated in the interviews, each small ple who did follow the rules went through the follow- boat is surveyed 1–2 times per year while each large ves- ing thinking process: “This is a system that is easy to sel is surveyed bi-annually. 25 individuals within the DoF cheat somehow. And then…then I, who am following the perform these inspections (The Icelandic National Audit rules, start to think: Why bother? Why don’t I just do this Office [INAO], 2018). too? Nobody does anything about it” (personal communication). In theory, law stipulating financial sanctions 4.2. Legislation Lacking Enforcement Mechanisms against those catching fish above their legal limit provides the DoF with all kinds of power to act. In reality, A system introducing quotas into the fisheries sector they lack the capacity to bring cases forward. By applying in Iceland was introduced in 1984, in an effort to re- system analysis we illustrate linkages between the lack of verse the trend of excessive overfishing (Danielsson, enforcement and the risk of corruption, as identified in 1997). The legislation on fisheries management has been our interviews (Figure 1).

Politics and Governance, 2020, Volume 8, Issue 2, Pages 167–179 170 Rumours about Eﬀort needed to illegal acvity in monitor the sector + + sector

+ – Actors perceiving Enforcement of Illegal acvity in R1 R2 others are cheang the legislaon sector –+ system

Consequences expected ++Probability actors will for engaging in illegal engage in illegal acvity acvity

Figure 1. A causal loop diagram representing the two reinforcing vicious cycles that drive illegal activity in the sector.

A causal loop diagram contains either reinforcing (R) rates of illegal deforestation (Ministry of Environment, or balancing (B) loops. The arrow denotes the nature of Water, and Forest, 2019) have had a considerable impact the interaction between two variables. If an arrow has on the country’s ability to ensure sustainable forestry a plus sign, it means that an increase in the first vari- management (Bouriaud & Marzano, 2016). The legisla- able will lead to an increase for the second variable, or tive act on the forestry resource in Romania is the Forest a decrease will lead to a decrease. If it has a minus sign, Code which aims to regulate the sustainable manage- the change occurs in the opposite direction, an increase ment of the forestry resources and provide forest re- will lead to a decrease or vice versa. When the loop con- sources for the current and future needs of society tains only plus signs, or the minus signs add up to an (Romanian Government, 2008). All forest is divided into even number, the loop is reinforcing; if not, it is balancing units, that are either privately or publicly owned. Each (Sterman, 2000). forest unit needs to be administered by a forest district. Two main reinforcing feedback loops increase the The National Forestry Administration, Romsilva, has his- risk of corruption in Figure 1, labelled R1 and R2. The torically been in charge of the forest districts and op- loops amplify behaviour, and in this case, the system erates under the Ministry of Environment, Water, and is trapped in a vicious cycle. Especially if no balancing Forests (Romanian Government, 2009). Forest guards loops are present to counteract the behaviour, for exam- are in charge of monitoring the forests. ple through anti-corruption measures aimed at increasing the perceived consequences of engaging in illegal ac- 4.3.1. Forest Administration tivity. When illegal activity takes place, more effort is needed to monitor the sector. It takes less time and re- Romsilva, a state-owned enterprise, operates on the ba- sources to verify that individuals are working according sis that it is financially autonomous (National Forestry to the law, when they indeed are, than when they engage Authority Act, 2009). It has a dual role, but it is tasked in illegal activity. When more effort is needed to monitor with maximizing profits generated from forestry exploita- the sector, enforcement of legislation decreases. When tion, while at the same time being in charge of sus- enforcement decreases, individuals expect fewer conse- tainably administering all publicly owned and national quences for engaging in illegal activity, which in return forests in Romania (Rosilva.ro, 2019; Volintiru, Trandafir, increases illegal activity in the sector. As illegal activity Toma, Nutu, & Damian, 2017). After changes were made increases, more rumours spread about such illegal activ- to the Forest Code in 2008, all forest owners, public and ity within the small community of fishermen. Those ru- private, were obliged to ensure that their forests were mours increase individual’s perceptions that others are managed according to the law (Niţă, 2015). In order to cheating the system, which will raise the probability of abide by that law, they needed to purchase forest admin- them engaging in illegal activity as well. As highlighted istration services from either Romsilva or a private for- above, this ‘why bother’ mentality raises the probability est administration service. Those services include a for- of illegal activity taking place, since the perceived bene- est management plan, usually valid for 10 years. Among fits might outweigh the costs, especially when accompa- other issues, the plan specifies the harvesting volume nied by low expectation of consequences. that is permitted and which tree species should be grown (Bouriaud & Marzano, 2016). The Romanian public cur- 4.3. Romania’s Institutional Organization rently holds a poor perception of forest administration since Romsilva has been affected by corruption scandals, Romania is known for its extensive forests and is one of resulting in a negative portrayal of their activities in the the main timber producers in Europe. However, alarming media (Palaghianu & Dutca, 2017; Volintiru et al., 2017).

Politics and Governance, 2020, Volume 8, Issue 2, Pages 167–179 171 4.3.2. Forest Guards to be repossessed and given back to its former owners and undergo extensive structural change (Palaghianu & The Forest guards are considered to be public officials as Dutca, 2017). In terms of the development of the forestry they operate directly under the Ministry of Environment, legislation, it became apparent that the changes made Water, and Forests. The country is separated into nine in 1996 resulted in a decrease in forest area due to the different territories, with each territory having a head lack of penal consequences for those who violated the forest guard in charge of the monitoring operations. law (Niţă, 2015). Even though legislation has since been Romania is divided into 42 counties, so one forest guard amended, the country is still struggling to combat ille- territory includes several counties. In total, there are gal activity in the sector. A majority of the Romanian approximately 600 forest guards employed, in charge interviewees brought up legislation in the forestry sec- of monitoring a forest area encompassing 6,5 million tor during the interviews. Concerns were raised over hectares (Institutul National de Statistica, 2018). The role how prescriptive and complicated the legislation was, of the forest guards was described in an interview with which made it difficult to understand and enforce. A cur- a current/former individual working in private forest ad- rent/former Romsilva employee stated: ministration as “everything” (personal communication). They are responsible for monitoring the entire harvesting Romania used to have, before the change from the phase, from verifying that management plans are done communist regime, one of the best administrative for- according to the law to how the timber is transported on est management systems in Europe. Very prescriptive, public roads. The individual further stated: very nice. We have very nice forests due to them. But this system is no longer adapted to the nature of the The payment method is problematic because you can- ownership nowadays. So, you cannot enforce it. You not survive with a salary of a forest guard [approx. will have a level, a high level of illegalities. Because 400 EUR/month]. You cannot have that salary when standards of the law are rather high up. (personal you guard a land that is so large and expensive. You communication) are responsible all year and all hours with this kind of salary. The legislation is made like this in order for Additional interviewees expressed that in their view, the politicians to have a certain amount of political capi- laws were outdated and unfair. The technical standard tal in elections. The forest guard is responsible for ev- specified in the legislation, as well as rules on species erything that gets stolen from the forest while he has composition and sampling density, were perceived as be- 1000 hectares to monitor. (personal communication) ing outdated and imposed, as they needed to be brought up to date with the modern era. An individual with exten- Numerous interviewees voiced concerns over the capac- sive experience in the forestry sector explained that the ity of the forest guards to perform their role. According legal code “is not proper for our time” (personal commu- to interviewees, salaries of forest guards used to be even nication) when discussing the technical standard in the smaller and were raised in an effort to combat illegal log- legislation, because forests were growing much faster ging. The rationale was that if forest guards had higher now due to a warming climate. Moreover, an intervie- salaries, there would be less incentive for them to en- wee currently/formerly employed in the private forest gage in corruption and criminal activity. Additionally, a administration expressed the view that “our legislation measure was introduced, so that if timber disappeared now starts from the idea that people steal and are cor- from the forest and the perpetrators not found, the for- rupt” (personal communication), which made the legis- est guards would be held personally responsible for the lation too prescriptive. The individual believed that the missing timber and have to pay a fine equal to the market legislation could be simpler if it emphasized the benefits value of that timber. Interviewees also raised the issue people could get from the sector, rather than solely lay- that forest guards were vulnerable when going into the ing out how people could be deterred from stealing from field to monitor the forests and should, therefore, carry the forest. Furthermore, forest owners were not satis- a weapon. Indeed, as analysis of the data was ongoing in fied with being obliged to buy forest administration ser- 2019, two forest guards in Romania were murdered whilst vices and the prescriptive legislation did not allow them carrying out their duties (McGrath, 2019). As a result, the freedom to make management decisions about their working as a forest guard can be viewed as a high-risk oc- own forest. They wanted to be free to set their own goals cupation, and the lower chamber in the Romanian parlia- for their forest, which aligns with what Palaghianu and ment recently approved legislation obliging forest guards Dutca (2017) found in their work. In Figure 2, we show- to carry a weapon on duty (“Decizie după crima,’’ 2019). case the linkages between the lack of enforcement and the risk of corruption. 4.4. Legislation Lacking Legitimacy and Enforcement As can be seen in Figure 2 loop R1, when there is less enforcement of the legislation, people expect fewer The forestry sector faced substantial challenges follow- consequences for engaging in illegal activity. The fewer ing the collapse of the communist regime in the coun- consequences they expect, the more illegal activity will try in 1989. A sector that had been state-owned needed take place in the sector, which means that more effort

Politics and Governance, 2020, Volume 8, Issue 2, Pages 167–179 172 Eﬀort needed to monitor the sector +

– Enforcement of R1 Illegal acvity in legislaon sector – +

Consequences expected + for engaging in illegal + acvity Perceived legimacy of Illegal acvity laws and regulaon in R2 accepted as social sector norm Illegal acvity + – perceived jusﬁed

Figure 2. A causal loop diagram representing the two reinforcing loops that undermine enforcement of the forestry legislation. is needed to monitor it, which again decreases enforce- cover wrong weighing [of fish] that then they are just ment. Loop R2 demonstrates that when enforcement de- up against someone that is out of their reach. Because creases, the perceived legitimacy of laws and regulation fishing company owners are so powerful, they bypass in the sector decreases, which increases the perception monitoring authorities. Bypass the DoF and just go that illegal activity is justifiable. When illegal activity is to the Ministry. Into the political parties. (personal increasingly seen as justified, it increases acceptance of communication) illegal activity as being socially normal, which again increases the illegal activity in the sector. When illegal ac- A similar view was held by a current/former public offi- tivity increases, so does the effort needed to monitor it. cial who stated that “the big fishing quota owners con- Once more effort is needed for monitoring, the capac- trol what goes into the legislation” (personal communica- ity to enforce the legislation goes down which translates tion). A former/current academic further stated: “In my into less enforcement. opinion interest groups have too much influence and Even though there seems to be awareness amongst politicians are their puppets” (personal communication). stakeholders that monitoring of the sector is ineffective Similar perceptions were found in Romania, as can be due to low capacity of public officials, recent measures seen in this comment from a current/former journalist: such as increasing the wages of forest guards does not appear to have resulted in improvements in enforce- Regarding the partnership between the industry and ment, as indicated by data on illegal logging (Ministry of Romsilva for example, and the Romanian state. I’ll put Environment, Water, and Forest, 2019). it this way: Because in so many cases the corrupt politicians use corrupt businessmen, for their profit or fi- 4.5. Perceptions of Suspicious Relationships nancial profit. Or from the political perspective, in so many cases, the election campaigns, every four years, In both the Iceland and Romania cases, interviewees held they were funded with illegal money coming from ille- perceptions that economically powerful actors in the sec- gal logging. (personal communication) tors had the ability to use their financial power to influence the political sphere. Monitoring authorities were A current/former forest owner further explained in an weak due to the fact that the line between business and interview “Because every government sees Romsilva as politics was thin. As described by a current/former mem- a… cow with milk.” It appears that managing the state- ber of the Icelandic parliament: owned enterprise has been seen by many as an opportu- nity to obtain wealth, since many former directors with It has…given up on being a monitoring system. Like strong political ties to the country’s ruling party, Partidul it should be. And instead operates within the bound- Social Democrat (PSD), have been implicated in corrup- aries that the interest groups decide. Set them, you tion scandals (Volintiru et al., 2017). Furthermore, dur- know. Of course, they observe and intervene, but, ing an interview with an individual with extensive experi- but…certain things they leave out. And they know, ence having served multiple roles in the sector, the indi- that if they go to [name of a big company] and un- vidual stated:

Politics and Governance, 2020, Volume 8, Issue 2, Pages 167–179 173 And nobody wants to go to…in the forest to cut, ting corruption is closely monitored by the EU (European to make some services and contracts with Romsilva. Commission, 2019). Issues and occasions where parlia- Because everybody knows what’s going on. They have mentarians, judges, and prosecutors have misused their some problems. But…why? Because the political man- power and functions for personal gain come up regularly agement, the political management are allowing ille- and prosecutions of such actions have been ineffective gal cutting. Illegal volumes. Illegal money. They are ac- (GRECO, 2018b). Regarding illegal logging specifically, the tually looking for illegal money. That’s the problem. European Commission sent the country a letter of for- (personal communication) mal notice urging action in February of 2020 (European Commission, 2020). Effective resource management is dependent on rules to be regarded as legitimate and fair by those operat- 4.7.1. Iceland’s Efforts to Increase Transparency ing in the sector. When perceptions of suspicious relationships between businesses and politicians are preva- The policies Iceland has adopted in order to address lent, it increases the risk of corruption in the value chain corruption risks within the fisheries sector have mainly as it undermines anti-corruption efforts. It is therefore been based on monitoring and incentives procedures important that such actions are directed towards foster- through increased transparency. However, according to ing collective action, and not solely designed through a Bauhr and Grimes (2017), accountability is not necessar- principal-agent approach (Mungiu-Pippidi, 2013). ily increased by transparency, as access to information does not guarantee answerability and sanctioning, and 4.6. Corruption Risks in the Value Chains more research is needed to understand the conditions under which increasing transparency will reduce corrup- An overview of the corruption risks identified by re- tion risks. spondents is demonstrated in Table 2. There we take According to Suuronen and Gilman (2019), at-sea the resource value chain from legislation to harvest- observer programs are the most effective monitoring ing, monitoring and revenue management, and point to schemes available today, but with recent technolog- which corruption risks were identified by interviewees at ical advances, remote electronic monitoring has be- each step. come increasingly feasible. Remote electronic monitor- In both cases, we see similarities in the corruption ing does have limitations, but complimenting it with risks throughout the value chains, even though the sec- human observers could increase transparency in fish- tors in question are different due to the nature of the eries management (Ewell, Hocevar, Mitchell, Snowden, resource. However, Iceland and Romania have tackled & Jacquet, 2020). Interviewees expressed satisfaction these risks in different ways. with the GPS tracking system, whereas according to a current/former academic: 4.7. Anti-Corruption Policies Any activities out at sea, so if they are illegally fishing Both countries are subject to having their anti-corruption somewhere, that is actually really well known because efforts evaluated by GRECO. The main issues in Iceland they have GPS. And if they are getting close to an area relate to conflicts of interests, as the management they shouldn’t be fishing, there is real-time monitor- of public affairs is excessively intermingled with pri- ing of that. (personal communication) vate interests. Lobbyism by third parties to influence government work and revolving doors go unregulated Transparency in fish pricing and catch numbers was (GRECO, 2018a). Romania’s progress towards combat- brought up in interviews, as those numbers were eas-

Table 2. Corruption risks identified within the sectors. Romania Resource value chain Iceland Legislation too complicated and outdated Legislation/regulations Legislation lacking enforcement mechanisms Underestimations in forest management Harvesting operations Underestimations of fish weight plans Illegal logging Discarding and high grading Forest guards do not have capacity to Monitoring of operations DoF does not have capacity to perform monitor the area they are assigned their legal duties Revenues generated in sector used to gain Revenue management Revenues generated in sector used to gain political influence political influence Source: The analytic framework is adapted from Alba (2009).

Politics and Governance, 2020, Volume 8, Issue 2, Pages 167–179 174 ily accessible online. However, concerns also harmonized the impression that the app had been discontinued for with observations from the INAO (2018) report, that political reasons. However, according to a media inter- even though catch numbers were available, the identi- view with the CEO of the IT company that developed fied corruption risks related to the weighing of catch the app, it is still functional, but it needed improvements and discard levels put those numbers under scrutiny. and updates which the company developed and made A current/former public official, for example, stated that ready for release in 2017. The PSD government, however, “nobody knows how much of the resource is being ex- blocked the update (Savaliuc, 2020). ploited” (personal communication). The INAO (2018) rec- ommended that the sector should take up electronic 5. Discussion monitoring by installing cameras on board as well as introduce whistleblowing protection measures for fish- In both of the cases in question, comprehensive legis- ermen coming forward with accusations of discard- lation regarding resource management had been put in ing. Those measures aim to reduce corruption risks in place. However, a lack of enforcement meant that the the harvesting operations and monitoring parts of the monitoring authorities were perceived of as weak and value chain. illegal activity was believed to go largely unpunished. When monitoring authorities in both countries failed to 4.7.2. Romania’s Application Inspectorul Padurii comply with their role due to lack of capacity or re- (Forest Inspector) sources, those operating in the sector become aware, which influences how anti-corruption policy measures According to Meehan and Tacconi (2017), the most com- play out. The resource governance systems can become pelling reduction in deforestation is brought about by stuck in a vicious cycle, as described and discussed for efforts to reduce the risk of corruption throughout all both fisheries in Iceland and forestry in Romania. Less ca- stages of forest management. Anti-corruption resolu- pacity to enforce legislation leads to the perception that tions through rule-changing interventions are less com- the consequences of illegal activity are minor, which can mon than those focusing on incentives and monitoring further amplify illegal activity in the sectors. Additionally, programmes and include the use of technology to by- results indicate that more resources are being taken than pass bureaucratic procedures, as in the Romanian case reported through underestimations in forest manage- (Hanna et al., 2011). Once asked about what had been ment plans and under-reporting of fish weights. In such done to increase trust in the sector, most interviewees instances, the countries are missing out on royalties and mentioned an application set up by the government tax revenues. which ordinary citizens could download to their mobile The underlying assumption going into the case stud- phones. Using the application, they could take pictures ies was that less corrupt countries were better able to of licence plates of trucks carrying logs, which could in- address corruption risks in their resource value chains. form them whether that truck was authorized to be driv- Similar risks were identified in both resource sectors but ing on that particular road at that time. A current/former the countries have opted for different anti-corruption academic stated: mechanisms to limit them. Even though Romania does have more serious challenges when it comes to fighting Of course when you are more open and…you are, you corruption, it was unexpected to find that in both cases, show what you are doing you get more trust. For ex- anti-corruption measures were being undermined by the ample, the authorities doing this system that every- perceptions of there being suspicious relationships be- body can check the illegal logging, you know, you get tween public power and private interests. This highlights more trust of this…of this ministry or politicians and that international indexes ranking countries’ perceived so on. (personal communication) corruption levels, such as the Corruption Perceptions Index, are not well suited to inform policymakers on It was seen as a good public policy instrument that the need for anti-corruption measures in specific sectors the general public could use to report on suspected or contexts. illegal activity. However, amongst the interviewees, These findings suggest that when there is a preva- there seemed to be confusion whether the applica- lent perception that governments have allowed moni- tion had been discontinued or not. An individual cur- toring institutions to become weak, due to lack of po- rently/formerly working for an NGO in Romania stated: litical will, it increases corruption risk in the resource “I just know that people were angry that they had this op- sector, which impedes sustainable management of nat- portunity to actually send official information to the au- ural resources. Addressing these risks through a frame- thorities and then it was just, it was just scrapped” (per- work that sees the collective action approach and the sonal communication). The same individual expressed principal-agent approach as complementary would be fears that the level of reporting of illegal logging was beneficial since elements of both have been identified down “because if people see that the state doesn’t even in this context. Furthermore, results from this study in- want to know, then why should you report it?” (personal dicate that when anti-corruption policies are not accom- communication). A majority of interviewees were under panied by sufficient enforcement and political will, the

Politics and Governance, 2020, Volume 8, Issue 2, Pages 167–179 175 probability of their success is reduced, which agrees with Conflict of Interests the findings of a recent report on corruption within the fisheries sector by the United Nations Office on Drugs The authors declare no conflict of interests. and Crime (2019). Vulnerabilities in Iceland due to conflicts of interests References and instances of misuse of power for personal gain in Romania, as brought up by GRECO, appear to have wider Alba, E. M. (2009). Extractive industries value chain: relevance. The implications being that weaknesses in na- A comprehensive integrated approach to develop- tional anti-corruption policies can translate into inade- ing extractive industries (Extractive Industries and quate corruption reduction measures in specific sectors, Development Series No. 3 and Africa Working Pa- which this study has shown is the case in countries with per Series No. 125). Washington, DC: The World both high and low levels of corruption. Questions that Bank. Retrieved from http://documents.worldbank. arose during the research process related to how suffi- org/curated/en/282401468339611763/pdf/484240 cient political will could be generated for strengthening NWP0Box31ei1for1development13.pdf national anti-corruption policies, and how governments Bauhr, M., & Grimes, M. (2017). Transparency to curb could convince the public of their merits as well as their corruption? Concepts, measures and empirical merit. policies, given that perceptions are not easily changed. Crime, Law and Social Change, 68(4), 431–458. Based on this work, we recommend that policy measures https://doi.org/10.1007/s10611-017-9695-1 should aim to build the institutional capacity needed to Bouriaud, L., & Marzano, M. (2016). Conservation, ex- enforce the comprehensive legal frameworks already in traction and corruption: Is sustainable forest man- place, which would show the public that there really was agement possible in Romania. In E. Gilberthorpe & G. a political will to tackle such issues. Hilson (Eds.), Natural resource extraction and Indige- nous livelihoods: Development challenges in an era of 6. Conclusion globalization (pp. 221–240). London: Routledge. Chambers, C., & Carothers, C. (2017). Thirty years af- In this study, we demonstrate mechanisms by which cor- ter privatization: A survey of Icelandic small-boat ruption risks are generated throughout resource value fishermen. Marine Policy, 80, 69–80. https://doi.org/ chains. Vicious cycles were identified in both cases, https://doi.org/10.1016/j.marpol.2016.02.026 where less capacity to enforce the legislation leads to Danielsson, A. (1997). Fisheries management in Iceland. the perception that the consequences of illegal activ- Ocean and Coastal Management, 35(2/3), 121–135. ity were minor. That further amplified illegal activity in Decizie după crima din Maramureș! Pădurarii vor primi the sectors, resulting in more effort being needed for arme pentru a se putea apăra [Decision after the monitoring, and subsequently, less capacity of authori- crime in Maramureș! The foresters will receive ties to enforce the legislation. A widespread perception weapons to defend themselves]. (2019, October 30). was also found among interviewees of there being a sus- Antena3.Ro. Retrieved from https://www.antena3. picious relationship between politics and big companies ro/actualitate/padurarii-vor-primi-arme-pentru-a- licensed by the authorities to harvest and process nat- se-putea-apara-543535.html ural resources. That perception seemed to be shaped Durham, E., Baker, H., Smith, M., Moore, E., & Morgan, by the inability of monitoring authorities to carry out V. (2014). The BiodivERsA Stakeholder Engagement their role. The processes we have described weaken anti- Handbook. BiodivERsA: Paris. Retrieved from https:// corruption efforts in the sectors and impede sustainable www.biodiversa.org/706/download resource management since it can lead to more of the European Commission. (2014). EU anti-corruption report. resources being exploited than officially reported. Even Brussels: European Commission. though our results point to mechanisms that increase the European Commission. (2019). Commission staff work- risk of corruption by undermining enforcement of legisla- ing document: Romania: Technical report accompa- tion, we propose that our findings could be strengthened nying the document Report from the Commission if the analysis were applied to further cases. to the European Parliament and the Council on Progress in Romania under the cooperation and veri- Acknowledgments fication mechanism. Brussels: European Commission. https://doi.org/10.1017/CBO9781107415324.004 This research was funded by the European Union’s European Commission. (2020). February infringe- Horizon 2020 research and innovation programme under ments package: Key decisions. Brussels: European the Marie Skłodowska-Curie Innovative Training Network Commission. grant agreement No. 675153 (AdaptEconII). We would Ewell, C., Hocevar, J., Mitchell, E., Snowden, S., & Jacquet, like to extend gratitude to the interviewees, as well as J. (2020). 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About the Authors

Johanna Gisladottir is a PhD student in the interdisciplinary Environment and Natural Resources pro- gram at the Faculties of Political Science as well as Earth Sciences, University of Iceland. In her project, she explores the linkages between corruption, trust, and natural resource governance, using qualitative research methods and systems analysis. She has a BA in Political Science from the University of Iceland and an MPhil in System Dynamics from the University of Bergen, Norway.

Sigurbjörg Sigurgeirsdottir is an Associate Professor of Public Policy and Governance at the Faculty of Political Science, University of Iceland, where she teaches courses on public administration, public policy, and policy change. She earned her MSc and PhD at the London School of Economics and Political Science in Social Planning. Her current research focuses on health and social care systems, trust and accountability, public policy, and governance.

Ingrid Stjernquist is an Associate Professor at the Department of Physical Geography, Stockholm University, Sweden, where she teaches courses on systems analysis, natural resource management, environmental governance, and sustainable forestry. Her professional background is in ecology, energy, and environmental system studies and soil chemistry. Her current research focuses on systems analysis, green infrastructure for ecological sustainability and human well-being, sustainable forestry and bioenergy, and participatory governance in Swedish forestry.

Politics and Governance, 2020, Volume 8, Issue 2, Pages 167–179 178 Kristin Vala Ragnarsdottir is a Professor in Sustainability Science at the Faculty of Earth Sciences, University of Iceland, where she teaches courses on sustainable futures, energy and Earths’ resources, and the Earth’s critical zone. She earned her MS in Geological Sciences and PhD in Geochemistry from Northwestern University in Evanston, Illinois. Her professional background is in geochemistry, the link between environment and health, and soil eco-social science. Her current research focuses on sustainability solutions for the future including natural resource management, and the wellbeing economy.

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